Most real estate agents complete nine out of every 10 deals from their sphere of influence. This usually includes loved ones, friends and past clients. Therefore, the amount of business you can generate from referrals is essential and should not be overlooked nor neglected.
Word of mouth
In the modern business world, 74% of consumers say that word-of-mouth is a critical influence on their purchases. In fact, one offline word-of-mouth impression increases sales by at least five times more than a paid advertisement. Consumers rely on word-of-mouth two to 10 times more than paid media.
Real estate referral fee
The standard rate for real estate referrals is 25%, but this is just a baseline to work from. It can really be whatever you want it to be, and can change based on the situation, the relationship of the people involved and the market. If you want to maintain a good relationship with people referring your business, it’s probably best not to be cheap when it comes to a real estate referral fee. Take care of the people taking care of you.
8 real estate referral statistics you should take into consideration:
- The typical agent earns 42% of their business from repeat clients and referrals from past clients.
- 82% of all real estate transactions come from repeat and referral business.
- 21% of agents get more than 50% of their business from referrals from past clients.
- 25% of agents generate more than 50% of their business from repeat clients.
- 92% of consumers trust recommendations from friends and family above all other forms of advertising.
- 82% of real estate sales result from agent contacts through previous clients, referrals, friends, family and personal contacts.
- 65% of agents get no business from open houses.
- 88% of buyers and 84% of sellers would use their agent again or refer them to others.
While marketing funnels, advertising and prospecting can generate business, there is still no channel as powerful as referrals and repeat business. Reaching out to your past clients and consistently touching base with everyone in your sphere of influence is an essential strategy that you need to have in place. It doesn’t have to be hour-long conversations or even face-to-face encounters. While those would work well, too, you can use the many means of communication available to set a healthy gameplan to nurture your network.
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